Oil
NNPC targets $20bn investment inflow into Nigeria by 2016
…announces significant advancement to oil finds in Chad basin
By Yemie ADEOYE
ABUJA-THE Nigerian National Petroleum Corporation, NNPC has announced plans of a 20 billion dollars investments into the Nigerian oil sector by 2016. Providing specifics on the intervention targets the Group Managing Director of the state owned corporation, Dr. Ibe Kachikwu stated that the NNPC is projecting the inflow of USD 20 billion in 2016 to enable the Corporation fund major projects and improve its bottom line going forward.
The GMD also indicated that the country may well be on the verge of a significant oil find in the lake Chad area in North East Nigeria based on analysis of recent seismic 3D data generated from the Chad Basin.
GMD NNPC, Dr. Ibe Kachikwu
In a presentation to the Petroleum Club, Lagos, over the weekend, titled: Ongoing Reforms in the Oil Industry: Impact of NNPC Reforms on the Nigerian Economy, Dr. Kachikwu stated that the Corporation is injecting a lot of energy into the effort to ensure success in this regard.
“There are signs from the latest 3D seismic studies that oil may well be very close to being found now in Lake Chad after very many years of trials. I think that this is very key. It is key both for the geographical balancing of oil production and it is also very key for the purpose of Refinery placement in the North in terms of access to crude. I am optimistic that by the end of the year we should be able to announce something major on this, ’’ the GMD said.
Dr. Kachikwu noted that in driving and developing Nigeria’s oil and gas sector, certain key areas of urgent intervention have been identified thus : running production acreages with transparent and profitable partnerships to bridge capacity and funding gaps; encourage investment inflow into to Nigeria’s oil and gas industry; engagement with local communities and driving regulation to develop the sector income- via encouragement of the fast track PIB to clarify direction and encourage long-term investment in the industry.
The GMD described 2016 as a crucial year for the NNPC as it is expected to transit from historic loss environment to profit making domain.
In the area of engagement with host communities, Kachikwu stated that the years ahead NNPC as the senior partner in the various Joint Venture arrangements must take leadership in fostering a healthy and symbiotic host community engagement outlook which must focus in what he termed “What the communities want us to do for them and not what we want to do’’.
Commenting on the Petroleum Industry Bill, PIB, the NNPC GMD noted that to achieve quick passage of the bill, it is crucial to isolate the fiscal regime from the current draft and move quickly to work on other pressing aspects of the proposed oil reform legislation.
He re-iterated that the Corporation under his watch is rigorously executing “20 Fixes” project which identified 20 critical issues that need to be addressed in order to re-position the 37 years old national oil corporation on the track of efficiency and profitability.
The target include: Reduce and audit cost, restructure corporate centre and staffing, renegotiate existing contracts, including PSCs, streamline subsidy management, boost pipeline security, enhance transparency and accountability, achieving zero tolerance for corruption, rebrand NNPP and unbundle PPMC.
Other initiatives include: Unbundling of the Nigerian Gas Company, reduce contracting Cycle, restructure refineries, improve information technology to drive business, embed staff and business performance management, restructure JV funding and reduce Cash Call, improve retail profitability , deploy and attract focused investments, re-kit NPDC, expand crude marketing and generate power profitability.
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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